Stocks snap two-day winning streak as 10-year yield hits highest level since 2008

Stocks moved lower on Wednesday as Wall Street struggled to extend its rally amid a sharp rise in Treasury yields.

The Nasdaq Composite lost 0.85% to close at 10,680.51. The S&P 500 ticked down 0.67% to 3,695.16. The Dow Jones Industrial Average slipped 99.99 points, or 0.33%, to finish the day at 30,423.81. The losses ended a two-day winning streak, though all three averages are still up for the week.

Earnings season is off to a solid start, but Treasury yields remained elevated on Wednesday, suggesting that recession fears are still intact. The 10-year Treasury yield traded as high as 4.136%, the highest level since July 23, 2008.

“If you keep things simple and say the 10-year Treasury is the risk-free rate that basically the majority of other asset classes in the world are priced off of … that is going to cause choppy markets across the board,” Keith Lerner, co-CIO and chief market strategist at Truist Advisory Services, said of the bond market volatility.

“The market is overall hanging in there somewhat, I don’t want to say well, but not as bad as it could be given that 4% is a demarcation line that has really pressured equities,” Lerner added.

The impact of higher rates is being shown sharply in the housing market, where housing starts fell faster than expected in September, the Census Bureau said on Wednesday.

The rate move also weighed on more speculative tech stocks. Among the biggest losers in the Nasdaq were Chinese tech stocks JD.com, falling more than 7%, and Baidu, sinking 8.8%.

The declines for the broader market came even as Netflix shares rallied more than 13% after the streaming giant posted earnings and revenue that beat estimates as well as strong subscriber growth for the third quarter. United Airlines climbed nearly 5% after its quarter also beat estimates on the top and bottom lines.